Question

Williams company computed its cost per equivalent unit for direct materials to be $2.60 and its cost per equivalent unit for conversion to be $3.75. a total of 250,000 units of product were completed and transferred out as finished goods during the month. the ending work in process inventory consists of 36,000 equivalent units of direct materials and 36,000 equivalent units of conversion costs. the amount that should be reported in ending work in process inventory is:

Answer 1

$228,600

Step-by-step explanation:

Equivalent units refers to expressing a number of incomplete units as a number of fully complete units. For example, there are 5 units that are 20% partially completed, we can express them as 1 equivalent unit.

The ending inventory was 36,000 equivalent units, both in direct materials and conversion costs.

value of ending inventory = ($2.60 x 36,000) + ($3.75 x 36,000) = $228,600